Staff Reporter :
Nagad, a mobile financial service (MFS) is under pressure to keep running its business operations with temporary licence as leading banks are not coming to form a subsidiary company with it, a mandatory obligation for obtaining full regulatory license.
The MFS operator has been running banking business with a temporary permission since the last one and half years. The company is trying to attract banks to form a subsidiary to run operations under the bank-led model.
Under the central bank regulation, Nagad must be a subsidiary of a bank to operate cash disbursement through its mobile channel business as cash transactions are strictly be regulated. But banks are not coming to do business with this private Fintech.
Currently, 15 MFS operators are operating cash transactions with valid license under the central bank’s direct supervision, while the Nagad is running its business in the name of Bangladesh Post Office (BPO) with a temporary permission since 2018.Bangladesh Bank (BB) extended this interim permission period by another three months until September 30 after the request from the BPO for the third time on the ground of the ongoing pandemic.
Some BB officials admitted that they are embarrassed with Nagaid’s operations without a valid licence and its repeated appeals to extend time limit of temporary permission.
Besides, allegation has been raised against Nagad of anomalies over aid disbursement under the Safety Net Programme. Many alleged that the government’s good move to help poor and distressed people is being maligned by fund disbursement via inefficiency of Nagad.
Nagad in recent months opened thousands of accounts ignoring rules like KYC rules resulting such mismanagement in the government’s fund disbursement, sources said.
Any fund transfer through digital channel is completely banking operations, according to leading bankers, so digital channel operators, like Nagad must follow banking rules in various steps from account opening to cash transactions with the most updated regulations, like Know Your Customer (KYC) in order to reduce risks of money laundering globally. Following some rule-breaking incidents, Bangladesh Bank, Finance Ministry and Bangladesh Financial Intelligence Unit expressed concerns many times over Nagad operations without BB’s supervision.
Finally, the Postal Ministry asked the BPO to place the service under central bank’s regulations and supervisions.
